Is it right to say even an institutional investor analyst can make no guarantees in inflation protection?”
Right now, there’s more than $9.5 trillion in cash on the sidelines — or more than twice the amount of money currently invested in stock mutual funds, according to MoneyNet.inc and the Federal Reserve. Private equity firms alone are believed to hold as much as an additional $1.3 trillion Editor’s Note: Keith Fitz-Gerald is Investment Director of Money Morning and The Money Map Report. Right now, there’s more than $9.5 trillion in cash on the sidelines — or more than twice the amount of money currently invested in stock mutual funds, according to MoneyNet.inc and the Federal Reserve. Private equity firms alone are believed to hold as much as an additional $1.3 trillion. While I’ve always doubted that the “money on the sidelines” argument is really all it’s cracked up to be, one can hardly argue with a recently released report from Harris Private Bank of Chicago (part of the US arm of the Bank of Montreal (BMO), which notes that, for 2 years, stocks have rallied whenever money-market a
The threat of inflation is drifting through the collective consciousness of investors these days. But will the inflation-protection investments so many are turning to work as advertised? Though the widely watched consumer-price index was down 1.5% in the 12 months through August, in blogs, newsletters, online chat rooms and elsewhere, institutional investors, economists and others are wringing their hands. They’re warning that the vats of stimulus money and credit that governments are pouring into economies world-wide will, at some point, result in rising prices for goods and services. Warren Buffett, the heralded investment oracle running Berkshire Hathaway Inc., wrote in an August editorial in the New York Times that the unchecked dumping of dollars into the U.S. economy “will certainly cause the purchasing power of the currency to melt.” That means inflation. Worried investors have been looking for insurance in the form of assets such as mutual funds and exchange-traded funds focuse
